The UAE Cabinet approved a record Dh51.4 billion federal budget for next year with a focus on education, healthcare, and community wellbeing as the country boosts spending off the back of stronger economic activity and a higher oil price.
Over the next four years, a total budget of Dh201.1bn has also been approved.
The budget for next year, which is balanced, is a 5.6 per cent increase from this year's Dh48.7bn, which also focused on social development, health and education.
The budget was approved during a Cabinet session, chaired by Sheikh Mohammed bin Rashid, held at the Sharjah International Book Fair on Tuesday.
The Vice President, Prime Minister and Ruler of Dubai, said all budget plans are for the service of the UAE society.
"We will spare no efforts in providing all the requirements for our people's happiness and well-being. The UAE people are our most valuable asset," he said.
The federal budget excludes the budgets of the individual seven emirates.
The Institute of International Finance is projecting the consolidated fiscal deficit of the UAE will shrink to 0.8 per cent of GDP next year from 3 per cent of the GDP in 2017. The increase in non-oil revenues through measures such as five per cent value-added tax will help reduce the UAE’s fiscal breakeven oil price to $58 a barrel in 2018 from $60 a barrel this year, offsetting any adverse impact from a potential increase in consolidated spending, the Washington-based institute said. Brent crude was trading at over US$63 per barrel on Tuesday, its highest level in more than two years.
The lion’s share of next year's budget, Dh26.3bn or 43.5 per cent of the total, is dedicated to social development programmes. Dh10.4bn is allocated for general education and higher education, totalling 17.1 per cent of the overall budget, and Dh4.5bn, or 7.4 per cent, is earmarked for the health sector.
Dh22.1bn or 36.5 per cent of the total budget has been allocated for government affairs.
Dh3.5bn will go to federal projects implemented by federal agencies. These include Dh891 million for ministries' projects, and Dh922m for projects aimed at developing and upgrading water and power stations in the country, which will be performed by the Federal Water and Electricity Authority.
Around Dh1.4 bn will be spent on projects under the Sheikh Zayed Housing Programme, Dh204m is allocated to the UAE Space Agency projects, and Dh25m to the UAE Red Crescent. The government also set aside Dh2bn to support government innovation through the Sheikh Mohammed Bin Rashid Al Maktoum Innovation Fund.
The Ministry of Finance worked in coordination with all ministries and federal entities to ensure their development plans and programmes are in line with the federal financial strategy, and with the objectives of the Government of the Future, reported state news agency Wam. The Cabinet met for its first extraordinary session on Tuesday since the recent government restructuring.
Sheikh Saif bin Zayed, Deputy Prime Minister and Minister of the Interior, and Sheikh Mansour bin Zayed, Deputy Prime Minister and Minister of Presidential Affairs, were among those who attended.
During its session, the Cabinet also adopted the restructuring of the Ministerial Council for Development, under the chairmanship of Sheikh Mansour bin Zayed.
The Cabinet also adopted Federal Decree-Law No. 08 of 2017 on Value Added Tax to be implemented at the beginning of January 2018, as well as a number of resolutions and initiatives on the agenda and approved a number of international treaties.
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
Roll of honour 2019-2020
Dubai Rugby Sevens
Winners: Dubai Hurricanes
Runners up: Bahrain
West Asia Premiership
Winners: Bahrain
Runners up: UAE Premiership
UAE Premiership
Winners: Dubai Exiles
Runners up: Dubai Hurricanes
UAE Division One
Winners: Abu Dhabi Saracens
Runners up: Dubai Hurricanes II
UAE Division Two
Winners: Barrelhouse
Runners up: RAK Rugby
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
MATCH INFO
Fixture: Ukraine v Portugal, Monday, 10.45pm (UAE)
TV: BeIN Sports
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
Moon Music
Artist: Coldplay
Label: Parlophone/Atlantic
Number of tracks: 10
Rating: 3/5
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Our legal columnist
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Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Tuesday's fixtures
Kyrgyzstan v Qatar, 5.45pm
